020 Salaries – Owners / Executive Managers

Expenses

Personnel

Synopsis

The compensation paid or accrued to Owners (Dealer Principal) and Executive Managers is recorded in Account 020, Salaries – Owners / Executive Managers.  Bonuses are not included, in this account.  Bonus payments should be recorded in Account 098, Bonuses-Owners.

Debits

Credits

  1. Compensation paid to or accrued for (including absentee compensation) active and inactive Owners, Partners, Proprietors or Executive Managers

 

 

Example 1

Record the monthly accrual of commission for the Executive Manager in the amount of $30,000.

Journal: Payroll

Entry:

 

Debit

Credit

Account 020-09

Salaries – Owners/Executive Managers – General & Administrative

$30,000

 

Account 321

Salaries, Wages & Commissions Payable

 

$30,000

Distribution of Expenses

 

Departmental Distribution

020 Salaries-Owners/Executive Managers

New Veh.

Used Veh.

Lease & Rental

Mechanical

Body Shop

Parts & Access.

Gen & Admin.

 

01

02

03

05

06

07

09

Compensation (including absentee compensation) of a sole Owner

 

 

 

 

 

 

Total expense

Compensation of inactive Owners

 

 

 

 

 

 

Total expense

Compensation of an additional Owner functioning as the service manager

 

 

 

 

Time

 

Time

 

 

Compensation of Executive Managers

 

 

 

 

 

 

Total

Commission

Comments

Only compensation paid or accrued to the Owners and Executive Managers are recorded in this account.  Employees who own shares should have their salaries recorded in their respective categories.

Note:

Professional tax and accounting advice should be obtained regarding compensation paid to Proprietors and Partners in order to minimize tax obligations for both individuals and the dealership.